ANZ raises investor home loan rates

This is a fairly sad state of affairs. The majors have already priced themselves out of the market for investors. Their rates were roughly 4.5% whilst competitors are offering deals from about 4.2% - 4.3%.

From there the ANZ and CBA (WPC and NAB to follow?) have increased rates by 0.27% giving investors a compelling argument to refinance. The rate rise alone will justify refinancing an investment loan of $350k or more. Throw in the fact that the competitors are already cheaper and people have a fairly compelling argument to move.

 

Yes very difficult for investors now. Most will find it difficult to refinance because of the severe tightening of servicing calculations. No choice but to stay and pay higher rates - or sell.

Can things get worse? (yes they can and will!)

 

CBA are increasing their variable for new and existing but their fixed for new only. Might be time to think about fixing if you can't refinance.

Interestingly, my CBA LOC's will now be cheaper than my SVR!

 

Not for anyone who has Banking equities,or the stakeholders in any Bank,always pays to spread it around..

 

No ones going to increase fixed rates for existing customers - i'm not even sure they're allowed to do that!

What makes people think the other APRA regulated banks WONT do this?

I think this is 'macro prudential' - system wide. Not individual banks.

ANZ...CBA...The rest will fall into line IMO.

Refinancing now based on price is a bit dramatic. Let the dust settle, and see where it lands.

Cheers,
Redom

 

I also HIGHLY doubt this is just a 'blatant' cash grab.

Its APRA forcing banks to hold more capital against their investment loans.

The reason why this smells macro are the lenders involved.

If it was micro, then the first bank to move on their investment loan book would be Macq or Westpac maybe, not ANZ.

Cheers,
Redom
I

 

Yep, existing fixed rates are safe.

 

Will SGB follow if WPAC do or different policies altogether?

 

True that Basel III isn't specifically targeted at investors but the capital adequacy ratio is being increased (from 1.2 to 1.8 IIRC) and the banks need to get the $$$ to satisfy that somewhere.

Two birds, one stone comes to mind.

 

Indeed. That's why it's called fixed. LOL.

 

Would be nice to see another RBA rate cut that flows to PPoR rates now that the IP Dragons have been tamed.

 

A question regarding these moves by APRA, do you think they are being prudent or are being somewhat overzealous?

 

Depends on your view on the role of government.

 

They are catching up from their inaction in the past few years.

The RBA rate could be much lower now if the APRA fools were not so lazy earlier.

 

Dimly

 

I think APRA is being prudent, but the banks are using this as an excuse to make billions while balancing their books.

 

Also be curious to understand how banks assess residential OO vs Investment loans. I mean interest only loans can exist for both.. not to mention what's stopping me from borrowing for OO for my next property and then moving out after a few weeks or even never moving in, and renting it out immediately?? Is there any legal or contractual clauses to cover them for you going down the investment route whilst applying for an OO loan?

SImilarly my first home purchase is a FHB land and build, but after the relevant time I am looking to rent this out so then this would be an OO loan yet a rental property?

Be good if some brokers or better still those working in the banking side could clarify? Just wouldn't want to get in any trouble.. but being abit cheeky and stretching the fine lines.... *whistle*

Oh and per quote above... surely you can just quote your mail address to be your parents or otherwise so they don't send it to your property of purchase/loan?

 

Apparently AMP is about to come out next week and exit investment lending.

We have a cat 5 storm warning ladies and gentlemen.

 

Mail is irrelevant. Doesn't matter where letters are sent and it would cause no suspicions if you changed your mailing address the day after settlement.

You will need to check the loan agreement which each loan, but generally there is no requirement to obtain a bank's permission to rent out a residential property and generally no notification is needed.

You could change your mind immediately after purchase and start renting the property. But if you did this with the intention from the beginning then you may be committing a crime by obtaining a financial advantage by deception. However the likelihood of getting charged with this would be extremely small. There could also be civil consequences.